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International Shipholding Corporation Reports Fourth Quarter and Year-End 2012 Results



  International Shipholding Corporation Reports Fourth Quarter and Year-End
  2012 Results

             Declares fourth quarter dividend of $0.25 per share

Provides updated 2013 guidance for net income of $10 to $12 million and EBITDA
                            of $63 to $67 million

Business Wire

MOBILE, Ala. -- February 6, 2013

International Shipholding Corporation (NYSE: ISH) today announced financial
results for the quarter ended December 31, 2012.

Fourth Quarter 2012 Highlights

  * Reported net income of $11.5 million for the three months ended December
    31, 2012, which included a non-cash foreign currency exchange gain of $4.7
    million and a gain of $12.2 million on the sale of a vessel
  * Closed on the acquisition of U.S. United Ocean Services, LLC (“UOS”) on
    November 30, 2012
  * As previously announced, acquired a 1999-built Pure Car Truck Carrier
    which has been deployed on a long-term time charter
  * Invested in four additional mini-bulkers as part of the 25% owned venture
    which now operates 14 mini-bulkers
  * Declared a fourth quarter dividend of $0.25 per share payable on March 4,
    2013, to stockholders of record as of February 19, 2013

Net Income

The Company reported net income of $11.5 million for the fourth quarter of
2012, which included non-operating gains of $4.7 million from its Yen
denominated loan and $12.2 million from the sale of a vessel, partially offset
by approximately $2.0 million of fees associated with the UOS acquisition. For
the full year 2012, net income was $22 million which included non-operating
gains of $5.5 million on the Yen facility and $16.6 million on asset sales.
For the full year of 2011, net income was $31.5 million which included a
non-monetary gain of $18.8 million on the purchase of the 50% interest in our
bulk joint venture entity.

Mr. Niels M. Johnsen, Chairman and Chief Executive Officer, stated, “In 2012,
we successfully executed our long-standing strategies in three important areas
during a challenging environment for the shipping industry. First, we
diversified and expanded our fleet to 50 vessels, including the recently
closed acquisition of United Ocean Services in the fourth quarter. Second, we
increased our fixed revenues by adding long-term contracts with creditworthy
customers. Finally, through transactions involving our Pure Car Truck
Carriers, we were able to add a modern vessel to our fleet and enhance our
financial flexibility.”

Operating Income

Operating income for the three months ended December 31, 2012, was $10.1
million, which included a $12.2 million gain on the sale of a vessel and
approximately $2 million of non-recurring fees associated with the UOS
acquisition. Excluding the gain and non-recurring fees, operating income was
essentially breakeven compared to $5.4 million for the comparable 2011 three
month period.

Following the acquisition of United Ocean Services, the Company changed its
reportable segments and now states results in six segments. The Company’s
gross voyage profit representing the operating results of its six reporting
segments was $10.7 million compared to $16.9 million in the 2011 three month
period. The comparable results by operating segment are shown below.

                                                                                                   
                  Jones      Pure Car     Rail-      Dry Bulk     Specialty
                  Act        Truck        Ferry      Carriers     Contracts     Other      Total
                             Carriers
                  (All Amounts in                                                         
                  Millions)
Fourth                      
Quarter 2012
Gross Voyage      $4.0       $4.6         $0.6       $0.7         $0.3          $0.5       $10.7
Profit
                                                                                                   
Depreciation      ($0.9)     ($2.4)       ($0.7)     ($1.7)       ($0.5)        $0.0       ($6.2)
Gross Profit      $3.1       $2.2         ($0.1)     ($1.0)       ($0.2)        $0.5       $4.5
(After
Depreciation)
                                                                                                   
Fourth
Quarter
2011
Gross Voyage      $0.8       $8.1         $1.5       $3.2         $3.3          $0.0       $16.9
Profit
                                                                                                   
Depreciation      ($0.4)     ($4.1)       ($1.0)     ($1.3)       ($0.5)        ($0.0)     ($7.3)
Gross Profit      $0.4       $4.0         $0.5       $1.9         $2.8          $0.0       $9.6
(After
Depreciation)
                                                                                                   
Variance
Gross Voyage      $3.2       ($3.5)       ($0.9)     ($2.5)       ($3.0)        $0.5       ($6.2)
Profit
Depreciation      ($0.5)     $1.7         $0.3       ($0.4)       ($0.0)        $0.0       $1.1
Gross Profit      $2.7       ($1.8)       ($0.6)     ($2.9)       ($3.0)        $0.5       ($5.1)
                                                                                                   

 
(See below Exhibit 99.2 to reconcile numbers presented above to GAAP figures.
With the UOS
acquisition, the Company has changed its reportable segment results with all
prior periods recasted. See
Exhibit 99.3 to view the updated profile of reporting segments. Additionally,
the Company’s 2012 10-K
filing will provide descriptions of each of the six (6) segments.)
 

Gross voyage profit for the Jones Act segment reflects one month of UOS
operating results and improved results from our molten sulphur carrier. Gross
voyage profit of the Pure Car Truck Carrier (“PCTC”) segment was lower due to
a fewer number of vessels operating in this segment as two International Flag
PCTCs were sold in the first quarter of 2012, lower supplemental cargo volumes
and higher operating lease costs on two U.S. Flag PCTCs. The results from the
Rail-Ferry segment declined due to lower cargo volumes moved during the
quarter. The lower results of the Dry Bulk Carrier segment reflect continuing
depressed dry bulk market conditions. The Specialty Contracts segment reported
a decrease in gross voyage profit due primarily to the expiration of the three
operating contracts with the Military Sealift Command (“MSC”), which occurred
in the first quarter of 2012, and the re-delivery of the ice-strengthened
vessel from its MSC contract in September of 2012. The Company’s other segment
reported better results.

Administrative and general expenses were approximately $2.5 million higher for
the quarter ended December 31, 2012, compared to the same period in 2011. The
variance was primarily due to non-recurring expenses associated with the UOS
acquisition, as well as employee bonus accruals, not accrued during the 2011
comparable period.

Gain on Sale of Other Assets

On October 22, 2012, the Company sold a vessel. The transaction generated a
book reportable gain of $12.2 million.

Interest and Other

Higher interest expense reflects one-time costs associated with the UOS
acquisition partially offset by lower outstanding debt service. During the
three month period ended December 31, 2012, the Japanese Yen weakened in
relation to the U.S. Dollar from 77.93 to 86.74, producing a current period
non-cash exchange gain of $4.7 million.

Balance Sheet

The December 31, 2012, balance sheet reflects the UOS acquisition. The
intangible asset balance of $45.8 million primarily reflects valuation mostly
attributable to the contracts of the UOS company. The goodwill balance of $2.7
million primarily reflects the implied premium paid for the acquisition of
UOS. The Company’s working capital at December 31, 2012, was approximately
$12.0 million. The cash and cash equivalent balance was approximately $19.9
million at year ending December 31, 2012.

Dividend Declaration

The Company’s Board of Directors declared a $0.25 dividend payable on March 4,
2013, for each share of common stock owned on the record date of February 19,
2013. All future dividend declarations and amounts remain subject to the
discretion of the Company’s Board of Directors.

Outlook

The Company’s updated guidance for 2013 of net income between $10 and $12
million and EBITDA between $63 and $67 million reflects a revised lower
outlook for the Dry Bulk Carrier segment, the re-delivery of the
ice-strengthened vessel from the MSC contract, an additional sale-leaseback
transaction and a slowdown in the weakening of the Yen. The Company currently
anticipates that approximately 68% of its 2013 revenues will be generated by
fixed contracts. Capital expenditures for 2013 are currently estimated at
approximately $21 million of which approximately $14 million will be expended
for regularly scheduled upgrading and maintenance of vessels in the current
fleet. The Company set a $1.00 dividend target for the 2013 fiscal year.

All 2013 outlook figures included in this release exclude the effects of
special items, future changes in regulation, the impact of unforeseen
litigation or unforeseen events or circumstances that reduce vessel deployment
or rates, any changes in operating or capital plans, and any future
acquisitions, divestitures, buybacks or other similar business transactions.
For purposes of this outlook section, EBITDA means earnings before interest,
taxes, depreciation and amortization. The payment of future dividends are
subject to declaration by the Company’s Board of Directors in its sole
discretion.

Conference Call

In connection with this earnings release, management will host an earnings
conference call on Thursday, February 7, 2013, at 10:00 AM ET. To participate
in the conference call, please dial (888) 211-0193 (domestic) or (913)
312-1417 (international). Participants can reference the International
Shipholding Corporation Fourth Quarter and Year-End 2012 Earnings Call or
passcode 4877805. Please dial in approximately 5 minutes prior to the call.

The conference call will also be available via a live listen-only webcast and
can be accessed through the Investor Relations section of the Company’s
website, www.intship.com. Please allow extra time prior to the call to visit
the Company’s website and download any software that may be needed to listen
to the webcast.

A replay of the conference call will be available through February 14, 2013,
at (877) 870-5176 (domestic) or (858) 384-5517 (international). The passcode
for the replay is 4877805.

About International Shipholding

ISH, through its subsidiaries, operates a diversified fleet of U.S. and
international flag vessels that provide worldwide and domestic maritime
transportation services to commercial and governmental customers primarily
under medium to long-term charters and contracts. www.intship.com.

Caution concerning forward-looking statements

Except for the historical and factual information contained herein, the
matters set forth in this release, including statements regarding our 2013
guidance, the expected benefits of the UOS acquisition and other statements
identified by words such as “estimates,” “expects,” “anticipates,” “plans,”
and similar expressions, are forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current expectations
only, and are subject to a number of risks and uncertainties, many of which
are beyond our control. Actual events and results may differ materially from
those anticipated, estimated or projected if one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect.
Factors that could affect actual results include but are not limited to: our
ability to maximize the usage of our newly-purchased and incumbent vessels and
other assets on favorable economic terms, including our ability to renew our
time charters and contracts when they expire and to maximize our carriage of
supplemental cargoes; our ability to effectively handle our leverage by
servicing and complying with each of our debt instruments; changes in domestic
or international transportation markets that reduce the demand for shipping
generally or our vessels in particular; industry-wide changes in cargo freight
rates, charter rates, vessel design, vessel utilization or vessel valuations,
or in charter hire, fuel or other operating expenses; the possibility that the
anticipated benefits from the UOS acquisition cannot be fully realized or may
take longer to realize than expected; political events in the United States
and abroad, the appropriation of funds by the U.S. Congress, and terrorism,
piracy and trade restrictions; the effects of more general factors, such as
changes in interest rates, in tax laws or rates, in foreign currency rates, or
in general market, labor or economic conditions; and each of the other
economic, competitive, governmental, and technological factors detailed in our
reports filed with the Securities and Exchange Commission. You should be aware
that new factors may emerge from time to time and it is not possible for us to
identify all such factors nor can we predict the impact of each such factors
on our business or the extent to which any one or more factors may cause
actual results to differ from those reflected in any forward-looking
statements. Accordingly, you are cautioned not to place undue reliance upon
any of our forward-looking statements, which speak only as of the date made.
We undertake no obligation to update or revise for any reason any
forward-looking statements made by us or on our behalf, whether as a result of
new information, future events or developments, changed circumstances or
otherwise.

 
Non-GAAP Reconciliation
(By Segment)

 
 
(All Amounts                                                                                 
in Millions)
                     Jones      Pure Car     Rail-      Dry Bulk     Specialty
                     Act        Truck        Ferry      Carriers     Contracts     Other      Total
                                Carriers
                                                                                               
Fourth Quarter
2012
Gross Profit         $3.1       $2.2         ($0.1)     ($1.0)       ($0.3)        $0.5       $4.5
                                                                                               
Allocated            ($0.5)     ($2.9)       ($0.5)     ($1.7)       ($1.0)        ($0.7)     ($7.3)
Overhead
Gain on Sale         $0.0       $12.2        $0.0       $0.0         $0.0          $0.0       $12.2
of Assets
*Add Back:
Unconsolidated       $0.0       $0.0         $0.0       $0.8         $0.0          $0.0       $0.8
Entities
Operating            $2.6       $11.5        ($0.6)     ($1.9)       ($1.3)        ($0.2)     $10.2
Income (Loss)
                                                                                               
 
Fourth Quarter
2011
Gross profit         $0.4       $4.1         $0.6       $2.0         $2.8          $0.0       $9.9
                                                                                               
Allocated            ($0.3)     ($1.5)       ($0.3)     ($0.7)       ($1.6)        ($0.5)     ($4.9)
Overhead
*Add Back:
Unconsolidated       $0.0       $0.0         $0.2       $0.2         $0.0          $0.0       $0.4
Entities
Operating            $0.1       $2.6         $0.5       $1.5         $1.2          ($0.5)     $5.4
Income (Loss)
                                                                                               
                                                                                               
* To remove the effect of including the results of the unconsolidated entities
in Gross Voyage Profit
                                                         
Exhibit 99.2
 

 
Updated Profile of Reporting Segments
                               
Jones Act                       Self-Unloading Bulk Carrier (1)
                                Molten Sulphur Carrier (1)
                                UOS, LLC (7)
 
Pure Car Truck Carriers         U.S. Flag Vessels (6)
                                International Flag Vessel (1)
                                 
Rail-Ferry                      Rail-Ferry Vessels (2)
                                Railcar Repair Facility

                                Rail Terminal
                                 
Dry Bulk Carriers               Handysize Bulk Carriers (5)
                                Capesize Bulk Carrier (1)
                                Handymax Bulk Carrier (1)
                                25% investment in the venture owning 14
                                mini-bulkers
                                 
Specialty Contracts             Vessels on contract servicing Indonesian
                                mining company (7)
                                Container Vessels (2)
                                Multi-Purpose Vessel (1)
                                Multi-Purpose Ice-Strengthened Vessel (1)
                                 
Other                           Ancillary Services (primarily brokerage)
                                 
Exhibit 99.3
 

 
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(All Amounts in Thousands Except Share Data)
(Unaudited)
 
                   Three Months Ended December 31,     Twelve Months Ended December
                                                       31,
                   2012              2011              2012              2011
Revenues           $ 56,810          $ 61,814          $ 243,496         $ 263,196
                                                                          
Operating
Expenses:
Voyage               45,262            44,367            188,508           192,082
Expenses
Vessel               6,186             7,144             24,366            25,388
Depreciation
Impairment           -                 -                 -                 -
Loss
Other                23                -                 32                -
Depreciation
Administrative
and General          7,373             4,908             23,244            20,961
Expenses
Gain on Dry
Bulk                 -                 -                 -                 (18,844   )
Transaction
Gain on
Sale/Purchase        (12,162   )       -                 (16,625   )       -          
of Other
Assets
                                                                          
Total
Operating            46,682            56,419            219,525           219,587    
Expenses
                                                                          
Operating            10,128            5,395             23,971            43,609     
Income
                                                                          
Interest and
Other:
Interest             3,257             2,891             10,409            10,361
Expense
Derivative           388               (8        )       485               101
Loss (Gain)
(Gain) Loss on
Sale of              (514      )       928               (580      )       747
Investment
Other Income
from Vessel          (572      )       (639      )       (2,387    )       (2,653    )
Financing
Investment           (79       )       (115      )       (470      )       (637      )
Income
Foreign
Exchange             (4,735    )       (24       )       (5,506    )       3,051      
(Gain) Loss
                     (2,255    )       3,033             1,951             10,970     
                                                                          
                                                                          
Income Before
Provision for
Income Taxes
and
Equity in Net
(Loss) Income
of                   12,383            2,362             22,020            32,639     
Unconsolidated
Entities
                                                                          
(Benefit)
Provision for
Income Taxes:
Current              16                149               296               680
Deferred             (53       )       -                 (453      )       -          
                     (37       )       149               (157      )       680        
                                                                          
Equity in Net
Income (Loss)
of
Unconsolidated
Entities (Net
of Applicable        (880      )       (432      )       (215      )       (410      )
Taxes)
                                                                          
Net Income         $ 11,540          $ 1,781           $ 21,962          $ 31,549     
                                                                          
Basic and
Diluted
Earnings Per
Common Share:
                                                                          
                                                                          
Continuing         $ 1.60            $ 0.25            $ 3.05            $ 4.42       
Operations
Basic Earnings
Per Common         $ 1.60            $ 0.25            $ 3.05            $ 4.42       
Share:
                                                                          
                                                                          
Continuing         $ 1.60            $ 0.25            $ 3.04            $ 4.40       
Operations
Diluted
Earnings Per       $ 1.60            $ 0.25            $ 3.04            $ 4.40       
Common Share:
                                                                          
Weighted
Average Shares
of Common
Stock
Outstanding:
Basic                7,203,911         7,140,752         7,195,606         7,131,820
Diluted              7,226,436         7,190,082         7,213,288         7,176,647
                                                                          
Dividends Per      $ 0.250           $ 0.375           $ 1.000           $ 1.500
Share
                                                                          

                                                
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(All Amounts in Thousands)
(Unaudited)
                                                  
                                                 December 31,     December 31,
ASSETS                                           2012             2011
                                                                      
                                                                      
Cash and Cash Equivalents                        $  19,868        $  21,437
Restricted Cash                                     8,000            8,907
Marketable Securities                               -                12,827
Accounts Receivable, Net of Allowance for
Doubtful Accounts
of $100 and $100 in 2012 and 2011:                  32,891           20,553
Federal Income Taxes Receivable                     -                242
Net Investment in Direct Financing Leases           3,540            6,278
Other Current Assets                                8,392            4,411
Notes Receivable                                    4,383            4,450
Material and Supplies Inventory                     11,847           6,020
Total Current Assets                                88,921           85,125
                                                                      
Investment in Unconsolidated Entities               12,676           12,800
                                                                      
Net Investment in Direct Financing Leases           13,461           43,837
                                                                      
Vessels, Property, and Other Equipment, at
Cost:
Vessels                                             525,172          581,705
Building                                            1,211            -
Land                                                623              -
Leasehold Improvements                              26,348           26,128
Construction in Progress                            10               20,729
Furniture and Equipment                             11,614           9,372
                                                    564,978          637,934
Less - Accumulated Depreciation                     (151,318)        (171,820)
                                                    413,660          466,114
                                                                      
Other Assets:
Deferred Charges, Net of Accumulated                19,892           15,983
Amortization
Intangible Assets, Net                              45,784           3,219
Due from Related Parties                            1,709            1,571
Notes Receivable                                    33,381           37,714
Goodwill                                            2,700            -
Other                                               5,509            202
                                                    108,975          58,689
                                                                      
TOTAL ASSETS                                     $  637,693       $  666,565
                                                                      

 
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(All Amounts in Thousands)
(Unaudited)
 
                                                 December 31,     December 31,
                                                 2012             2011
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                      
Current Liabilities:
Current Maturities of Long-Term Debt             $  26,040        $  36,079
Accounts Payable and Accrued Liabilities            50,896           31,484
Total Current Liabilities                           76,936           67,563
                                                                      
Long-Term Debt, Less Current Maturities             211,590          286,014
                                                                      
Other Long-Term Liabilities:
Lease Incentive Obligation                          6,150            6,640
Other                                               80,718           57,153
                                                                      
TOTAL LIABILITIES                                   375,394          417,370
                                                                      
Stockholders' Equity:
Common Stock                                        8,632            8,606
Additional Paid-In Capital                          86,362           85,830
Retained Earnings                                   217,654          204,109
Treasury Stock                                      (25,403)         (25,403)
Accumulated Other Comprehensive Loss                (24,946)         (23,947)
TOTAL STOCKHOLDERS' EQUITY                          262,299          249,195
                                                                      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $  637,693       $  666,565
                                                                      

 
INTERNATIONAL SHIPHOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All Amounts in Thousands)
(Unaudited)
                                                                 
                                              Twelve Months Ended December 31,
                                              2012                2011
                                                                   
Cash Flows from Operating Activities:
Net Income                                    $  21,962           $ 31,549
Adjustments to Reconcile Net Income to
Net Cash Provided by
Operating Activities:
Depreciation                                     24,975             26,391
Amortization of Deferred Charges and             11,034             8,954
Other Assets
Deferred Tax Liability                           -                  -
Gain on Dry Bulk Transaction                     -                  (18,844  )
Impairment Loss                                  -                  -
Non-Cash Stock Based Compensation                1,216              1,801
Equity in Net Income of Unconsolidated           215                410
Entities
Distributions from Unconsolidated                -                  750
Entities
Non-Cash Acquisition of Consolidated             -                  -
Entity
Gain on Purchase / Sale of Assets                (16,625   )        -
(Gain) Loss on Sale of Investments               (580      )        747
(Gain) Loss on Foreign Currency Exchange         (5,506    )        3,051
Changes in:
Deferred Drydocking Charges                      (11,304   )        (6,803   )
Accounts Receivable                              (3,533    )        (1,290   )
Inventories and Other Current Assets             (2,734    )        (1,200   )
Other Assets                                     2,121              669
Accounts Payable and Accrued Liabilities         (6,925    )        3,133
Other Long-Term Liabilities                      (4,599    )        (3,045   )
Net Cash Provided by Operating Activities        9,717              46,273    
                                                                   
Cash Flows from Investing Activities:
Principal payments received under Direct         3,877              5,583
Financing Leases
Acquisition of Frascati Shops Inc and            (620      )        -
Tower, LLC
Capital Improvements to Vessels and Other        (50,729   )        (109,631 )
Assets
Proceeds from Sale of Assets                     225,315            -
Purchase of Marketable Securities                -                  (74      )
Proceeds from Sale of Marketable                 12,433             2,413
Securities
Investment in Unconsolidated Entities            (1,000    )        (2,545   )
Acquisition of Unconsolidated Entity             -                  7,092
Net Decrease/(Increase) in Restricted            (1,093    )        (8,907   )
Cash Account
Proceeds from Sale of Unconsolidated             -                  526
Entities
Acquisition of United Ocean Services, LLC        (112,242  )        -
Changes in Other Notes Receivables               239                -
Proceeds from Note Receivables                   4,632              4,735
Payments on Related Party Note                   -                  -         
Receivables
Net Cash Provided by (Used In) Investing         80,812             (100,808 )
Activities
                                                                   
Cash Flows from Financing Activities:
Common Stock Repurchase                          -                  -
Proceeds from Issuance of Debt                   137,930            135,330
Repayment of Debt                                (220,337  )        (66,498  )
Additions to Deferred Financing Charges          (1,275    )        (1,788   )
Common Stock Dividends Paid                      (8,416    )        (10,981  )
Net Cash (Used In) Provided by Financing         (92,098   )        56,063    
Activities
                                                                   
Net (Decrease) / Increase in Cash and            (1,569    )        1,528
Cash Equivalents
Cash and Cash Equivalents at Beginning of        21,437             19,909    
Period
                                                                   
Cash and Cash Equivalents at End of           $  19,868           $ 21,437    
Period
                                                                   

Contact:

The IGB Group
David Burke, 646-673-9701
dburke@igbir.com
or
Leon Berman, 212-477-8438
lberman@igbir.com
or
International Shipholding Corporation
Niels M. Johnsen, 212-943-4141
Chairman
or
Erik L. Johnsen, 251-243-9221
President
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